We expect total revenue to come in at RMB887m (+3% QoQ, +39% YoY), within the company-guided range of RMB860-900m and 1% higher than consensus. We believe PC monetization continued to drive the top line, with an increasing contribution from mobile (likely to hit 10% of total revenue). We expect the company to break even on a non-GAAP basis for the first time, primarily due to a scale-down of content costs as a percentage of revenue (38% in 4Q13, vs 58% in 3Q13).

First-quarter revenue guidance will be important, because “quarterly revenue guidance is a good indicator of whether mobile monetization is incremental to the PC or if it’s more of a reshuffle of budget spend between PC and mobile.”

J.P. Morgan also wants to know Youku’s content acquisition strategy. Youku has a lot of deep-pocketed competitors these days: Baidu’s iQiyi (BIDU), Tencent Video (TCEHY) and Sohu Video (SOHU), to name a few.

Copyright 2015 Dow Jones & Company, Inc. All Rights Reserved

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our
Subscriber Agreement
and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit